{EDIT} Disregard {/EDIT}
Right, now that I've actually read the rule (and honestly, I don't remember that bit being there last edition), let's try again:
(1) Wounds are allocated to the model closest to the enemy, where two or more models are the same distance, the player being shot at can choose which one to count as "closest". Swarms steps in when there are Swarm models with less wounds than others, but only affects the choice of which model is closer, it does not expand the "what model is closest" to include the whole unit.
Example - A unit of three swarms is shot at. Two bases had already taken a wound earlier, and one base is at full wounds. The enemy is 8" from both one of the wounded bases and the unwounded base, but 9" from the last (wounded) base. When determining which is closer, the defending player doesn't get a choice (like they would for a non-swarm unit), and has to allocate wounds to the wounded base up front first.
Once that model is dead, you're left with an unwounded base 8" away, and a wounded base 9" away - this time the Swarm rule doesn't interfere, and you allocate to the unwounded base first.
(2) Similarly, when in base contact, all the models are 0" away - forcing you to allocate to wounded swarms first. But if one (or more) swarm(s) are not in B2B (there's no room or they were too far away to pile in), then you use the same method - wounds allocated to the closest (B2B) first, and of those in B2B allocating to wounded swarms first.
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